US tariffs: We're still not sure if Australia will be exempt, says Ciobo

It is still not clear whether Australia will be exempt from sweeping US tariffs on steel and aluminium imports announced last week.

Trade Minister Steven Ciobo said he is seeking clarification on the implications for local steel producers.

And Prime Minister Malcolm Turnbull has come out swinging against protectionist moves by the US, stressing the need for open markets globally.

This follows an announcement by US President Donald Trump to slap tariffs of 25 per cent on all imported steel and 10 per cent on broad categories of aluminium imports.

The move has prompted some trade partners to consider retaliatory measures, which could spark a trade war between the US and European and Asian markets.

Mr Trump has already threatened further protectionist measures against Europe if it retaliates to his tax on steel imports.

Mr Turnbull said he advocated the benefits of free trade in his recent visit to Washington, despite being unsure if steel tariffs will apply to Australia.

Acting in Australia’s interests

“Protectionism is not a ladder to get you out of the low-growth trap, it is a shovel to dig it a lot deeper, that is why when President Trump pulled out of the Trans-Pacific Partnership, we soldiered on,” Mr Turnbull said.

“You can see how important it is for the Australian government to pursue Australia’s interests in free trade and open markets and we make that case around the world, I was making that case in Washington only a week or so ago.”

Mr Ciobo spoke with US Commerce Secretary Wilbur Ross over the weekend, but was unable to learn if Australia will be exempt.

“Unfortunately, at this stage, it is not clear to me or to Australia whether or not we will be captured by the President’s announcement,” Mr Ciobo told Sky News.

“What is clear is that the US is still working through some of the detail with respect to this announcement. The extent to which Australia may be captured is yet to be determined.

“Ultimately, I believe it will come down to a decision of the President’s about whether he wants to have exemptions or not and in the fullness of time we’ll see whether that’s the case.”

Case for an exemption

He had made the point with Mr Ross that Australia believed it should be exempt, for reasons including “the understanding reached at the G20 that Australia would be exempt last year”.

He rejected any suggestion it was a snub to Australia, saying “every country finds itself in the same situation in dealing with the US administration”, including Canada, the biggest buyer of US steel.

Mr Ciobo was confident Australia’s anti-dumping commission would prevent cheap foreign steel that would usually go to the US from flooding the local market.

On Friday Mr Ciobo condemned the US tariffs on steel and aluminium imports as a threat to Australian jobs, amid fears of collateral damage from a US-China trade war.

Seeking urgent advice

Mr Ciobo said he was seeking urgent advice from Mr Ross and Australia’s ambassador to the US, Joe Hockey, on whether Australian exporters would be exempt from the tariff hike, which is primarily aimed at China.

He warned the consequences of a US-China trade war would be devastating, slowing global growth and risking the jobs of millions worldwide.

Australian steel exports to the US are worth roughly $US210 million (A$270m) a year while aluminium exports are worth about $US213m a year.

Australia has a free-trade agreement with the US, which includes penalties for breaches of trade obligations. But officials said it was too early to consider what action could be taken against the US when the impact of the tariffs on Australia was unclear.